Ribavirin improves treatment response to peginterferon in chronic hepatitis C but the mechanism remains controversial. We studied correlates of response and mechanism of action of ribavirin in treatment of hepatitis C. 70 treatment-nave patients were randomized to 4 weeks of ribavirin (1000-1200 mg/d) or none, followed by peginterferon alfa-2a and ribavirin at standard doses and durations. Patients were randomized to undergo a liver biopsy either 24 hours before, or 6 hours after starting peginterferon. Hepatic gene expression was assessed by microarray and interferon-stimulated gene (ISG) expression quantified by the nCounter platform. Temporal changes in ISG expression were assessed by qPCR in peripheral-blood mononuclear cells (PBMC) and by serum levels of IP-10. After four weeks of ribavirin monotherapy, HCV levels decreased by 0.5 log10 (p=0.009 vs. controls) and ALT by 33% (p<0.001). Biochemical, but not virological response to ribavirin monotherapy predicted subsequent response to combination treatment (rapid virological response, 71% in biochemical responders vs. 22% non-responders, p=0.01; early virological response, 100% vs. 68%, p=0.03, sustained virological response 83% vs. 41%, p=0.053). Ribavirin pretreatment, while modestly augmented the induction of ISGs by peginterferon, did not modify the virological response of subsequent treatment with peginterferon and ribavirin. Ribavirin monotherapy caused a decrease in serum IP-10 levels but had no effect on ISG expression in PBMC. Ribavirin is a weak antiviral but its clinical effect in combination with peginterferon seems to be mediated by a separate, indirect mechanism, which may act to reset the interferon responsiveness in HCV-infected liver. Ribavirin pretreatment does not alter the clinical outcome of subsequent combination therapy. Recent identification of IL28B gene polymorphisms associated with hepatitis C virus (HCV) clearance suggests a role for type III interferons (IFNs) in HCV infection. The function of type III IFNs in intrinsic antiviral immunity is poorly understood. In order to characterize the role of the type III IFN system in HCV infection, we utilized several in vivo and in vitro models, which include analysis of gene expression in liver biopsies from HCV infected chimpanzees and patients. In addition, mRNA and protein expression was studied in HCV infected hepatoma cell lines and primary human hepatocytes. We show that HCV infection of primary human hepatocytes results in a robust induction of type III IFNs, leading to IFN-stimulated gene (ISG) expression. Chimpanzees undergoing experimental HCV infection demonstrated a prompt hepatic induction of IL28, associating with ISG upregulation, but a minimal type I IFN induction. Analysis of liver biopsies from HCV-infected patients supported a close correlation among hepatic expression of IL28 and ISGs, but not with type I IFNs. In addition, HCV infection elicits a much broader range of gene expression alterations in addition to ISG induction. The induction of type III IFNs is mediated by IRF3 and NF&#954;B-dependent pathways. Type III IFN, aside from upregulating ISGs with a different kinetic profile, induces a distinct set of genes from type I IFN, potentially explaining the functional difference between the two types of IFNs. Human embryonic stem cells (hESCs), human induced pluripotent stem cells (hiPSCs) and the technology to developmentally program these cells to various cell lineages offer great promise for cell therapy of various diseases. Recently, different protocols to differentiate them into hepatocytes-like cells (HLC) have been described. In this context, we hypothesize that this approach could be useful in developing a relevant model for HCV infection in vitro. Moreover, the hiPSCs approach could allow the generation of patient-specific hepatocytes with promising opportunity for cell therapy of viral liver diseases. We have generated hiPSCs from primary fibroblasts using lentiviruses or Sendai virus vectors, and characterized them in comparison to hESCs. Human pluripotent stem cells were efficiently differentiated into HLC, as demonstrated by induction of the expression of hepatic markers and the secretion of hepatic proteins (AFP and albumin) in the supernatants. Moreover these cells recapitulate hepatocyte-specific metabolic functions like lipid and glycogen accumulation, and indocyanin green metabolism. These HLC can be infected with HCV. The infected cells also respond to antiviral therapy, such as interferon-a and 2'-methylcytidine, a nucleoside analog inhibitor of HCV polymerase. HCV infection also induces intrinsic innate immune response including interferon response. In conclusion, we demonstrated that HLC derived from human pluripotent stem cells support infection by HCV. Moreover, generation of iPSC from primary fibroblasts would allow us to generate patient-specific HLC, and thus reproduce in vitro a personalized model for the HCV infection. Moreover, by targeting proviral cellular factors or introducing antiviral factors in these cells, we can generate HCV resistant-patient specific-hepatocytes. This approach holds great promises for cell therapy of hepatitis C, particularly for patients with end-stage liver diseases.